Paying for referrals is a breach of the law: Settlement agents bulletin issue 65 (February 2017)
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Settlement agents have recently notified the Department about being approached by a Victorian company regarding possible business arrangements that has raised concern.
The Victorian company advised their plan was to provide free referrals to settlement agents for an initial period to demonstrate their business integrity, after which they would charge a fee per referral.
The Department would like to remind agents that it is a breach of the legislation for settlement agents to pay or provide reward to a person or corporation in return for receiving referrals.
Section 44(8) of the Settlement Agents Act 1981 states:
‘A licensee shall not, whether directly or indirectly, pay or give any reward to any person referring to the licensee any business involving the performance of the functions of a settlement agent.’
If convicted for an offence against this section a settlement agent is liable to a penalty of up to $20,000.
The Department strongly encourages settlement agents to reject any such approaches and appreciates the “heads-up” sharing of information that will assist the industry to remain compliant.
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